Fed Regulator Says Employees Were Told to Accept View That Wealthy People Are Above Consumer Laws

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Below is a key excerpt from this controversial and widely cited article by Michael Lewis in Bloomberg. ProPublica has a much longer article that goes into greater detail on this situation and the allegations of former Fed employee Carmen Segarra. For an audio interview with Carmen Segarra, see the This American Life podcast.

Quote:

The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that "once clients are wealthy enough certain consumer laws don't apply to them." After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement -- to which the regulator replied, "You didn't hear that." This sort of thing occurred often enough -- Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact -- that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.